Your business is performing well. Revenue is strong, the team is growing and opportunities seem to always be on the horizon. But with growth comes exposure. The prime years of a business can bring increased risks - financial, legal and operational. Without the right protections in place, hard-won success can become vulnerable.
In our latest blog, we highlight some key areas where financial planning can aim to help business owners strengthen and safeguard their business during this critical stage.
Recognising the Prime Years - and Their Risks
The prime years often come with consistent profitability, expanding operations and increasing reliance on a capable team. These are milestones worth recognising - but they also bring complexity. Business owners in this phase may be exposed to greater financial liabilities, concentrated revenue streams and reliance on a small group of individuals.
It’s worth stepping back to ask: if a major disruption occurred tomorrow, how well-positioned is the business to absorb the impact?
Building Financial Resilience Within the Business
Resilience isn’t just about weathering a downturn - it’s about being equipped to respond to change without derailing progress. Maintaining adequate working capital and building a cash reserve can offer valuable flexibility. Rapid growth often ties up cash in payroll, stock or new contracts - leaving less available for emergencies.
This is also the time to review the business’s tax position. Are there opportunities to extract profits more tax-efficiently? Is the business structured in a way that supports future goals, such as exit planning or family succession? The right planning now could support both immediate needs and long-term objectives.
Protecting the People Behind the Performance
Businesses in their prime often rely on a few key individuals - founders, directors or technical leads - whose absence would cause disruption. Protection planning can help mitigate that risk. Key person cover, for instance, is designed to help a business manage the financial impact if a vital team member is unable to work due to illness or death.
Similarly, shareholder protection policies can support a smoother transition of ownership if a director dies or becomes critically ill. Without this in place, surviving shareholders or family members may face difficult decisions under pressure. These policies don’t stop disruption but they can provide capital at the point it’s most needed.
Planning Beyond the Business
When profits are strong, reinvesting often feels like the natural choice. However, it’s also a valuable time to consider extracting funds from the business in a structured way - whether through pensions or tailored investment strategies. This approach not only supports your personal financial objectives but also helps reduce future reliance on the business.
Exit planning may not feel urgent but it becomes much harder to get right if left too late. If your business is valuable now, consider what would need to happen for it to be sale-ready or transferable when the time comes.
Closing Thoughts
Your business may be in a strong position today, but that doesn’t remove the need to plan for tomorrow. The business owners who achieve the greatest long-term success are often those who address the tough questions before challenges arise.
If you’re ready to take a closer look at how your business and personal finances support one another, we’d be happy to start the conversation.
*Investments can go down as well as up and you might not get back the capital invested.
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